Honduras has made efforts to improve its economy. Honduras has established the ‘Bitcoin Valley’ in the tourist resort of Santa Lucia. In order to stimulate tourism spending, several companies in Santa Lucia are now accepting Bitcoin payments. Around 60 businesses initially accept Bitcoin payments.
Honduras launches Bitcoin Valley aimed at improving the tourism sector
Honduras is the first nation in Central America to have a “Bitcoin Valley,” with tourist hotspot Santa Lucia having a bitcoin-accepting business community. The town, which is about 35 miles from Tegucigalpa, allows businesses to take cryptocurrencies for payment.
According to a news report from Honduran publication La Prensa, some locals of Santa Lucia, such as shopping mall proprietor Cesar Andino, anticipate that the program will increase retail opportunities and attract more people who want to use this currency. Andino added:
Accepting Bitcoin will allow us to open another market and win more customers. We have to globalize. We cannot close ourselves off from technology, and we cannot be left behind when other countries are already doing it.
The initiative is meant to attract more tourists. Other countries, such as El Salvador, have benefited from embracing cryptocurrency, attracting tourists and entrepreneurs. Initially, 60 companies will be able to accept cryptocurrencies. Furthermore, they will be trained on how to do so before it is expanded throughout the country and industries.
The initiative began on Thursday, allowing customers of local businesses to pay with United States dollars, Honduran Lempira, or Bitcoin. The municipal government of Santa Lucia collaborated with the Coincaex cryptocurrency exchange, Blockchain Honduras, and the Technological University of Honduras to create the Bitcoin Valley initiative.
Coinincaex provides the equipment and services needed to make crypto payments, while Blockchain Honduras delivers cryptocurrency wallet training. The government of Honduras appears to be warming up to crypto, much like several other nations in the area.
According to Leonardo Paguada, the creator of the Blockchain Honduras group, vendors will be able to make immediate payments in Honduran currency. However, this is not the first time that Honduras has collaborated with cryptocurrency.
According to La Prensa, customers can pay for goods and services in BTC by sending the coins to the Coincaex exchange. The exchange will then instantly send the value of the BTC in Lempira to the merchant, helping them avoid loss from price volatility. As a result, business owners do not receive BTC as payment under this plan.
After taking a big hit during the COVID-19 pandemic, businesses in the tropical coastal nation hope that the Bitcoin Valley will re-spark tourism expenditures. Honduras earned roughly $556 million in tourism income each year in 2019 before plummeting more than 66% to $189 million in 2020, according to data from Macrotrends, a global economic tracker.
Latin America becomes a leading crypto household
Honduras has become the latest country in Central America to launch a program that allows people to use cryptocurrency to pay for goods and services. Central American nations have been experimenting with crypto to assess the risks and benefits. In April 2022, Honduras’ Economic Zone recognized bitcoin as a legal currency, allowing taxes to be paid in bitcoin. It has also allowed businesses to issue bitcoin bonds.
El Salvador was the first country to accept bitcoin as a legal currency in 2021, and it launched an extensive campaign to teach its citizens about its uses. El Zonte has a similar Bitcoin Beach tourist attraction, which has been open since December 2020.
In Guatemala, the Bitcoin Lake project is located at tourist attractions around Lake Atitlan in the Sierra Madre Mountains. Mayor Cesar Piedrasanta of Panajachel, which is in the region, has also been mining BTC with electricity that he says would otherwise be lost and a source of income for his community.
The IMF and the Bank for International Settlements (BIS) have warned about cryptocurrency’s dangers. The BIS stated that crypto fears had been realized and cited the recent market crash and TerraUSD’s collapse as proof.
The IMF has raised concerns about the Central African Republic and El Salvador using bitcoin as a legal currency. It’s been claimed that because of DeFi, financial markets are at risk and need to be regulated.
The spread of bitcoin has prompted concerns that these kinds of plans may fuel money laundering and financial chaos while widening the digital divide since poorer areas may be unable to access the technology.
The cryptocurrency winter has led to a drop in crypto tourists across the world. Furthermore, the price drops have resulted in big selloffs, which have had an adverse impact on economies that are heavily reliant on cryptocurrencies. Nonetheless, things appear to be changing for the better, thus bringing forth fresh possibilities. The decision by the Honduran government might reignite interest in cryptocurrency.